A project has cost $50,000. The project is scheduled to complete three months from now and is...

Question:

A project has cost $50,000. The project is scheduled to complete three months from now and is scheduled to cost another $20,000.

What is the sunk cost of the project?

Sunk Costs:

The total costs incurred by a firm in executing a given project may be categorized into various kinds such as the fixed costs and the variable costs or the manufacturing costs and the selling & administrative expenses or the incremental and the non-incremental (or sunk) costs etc.

Answer and Explanation: 1

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The sunk cost of the given project is $50,000 as it has already been incurred (or sunk) and hence the future decision making will not be affected or...

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Sunk Costs: Definition & Examples

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Chapter 31 / Lesson 8
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Sunk costs refer to incurred costs that can no longer be recovered. Learn more about the definition of sunk costs and explore examples of sunk costs in businesses.


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